Midwest Bank Helps Unemployed Customers In Unexpected Way
Since the housing bubble burst dramatically in 2008, and unemployment soared, lenders have been trying to ease the pain of those jobless homeowners who were suddenly saddled with impossible debt. Fannie Mae and Freddie Mac began offering, and then extending, temporary reprieves from mortgage payments. But for many, that simply delayed the problem, and home counselors cautioned that a real solution had to be long-term.
While it sounds like an initiative straight out of "It's a Wonderful Life," the Fifth Third considers it smart business. After all, the job-search program costs $1,500 per person -- a pittance compared to the $40,000 to $60,000 that a bank loses, on average, when someone forecloses on a mortgage. And unemployment is the primary reason a person defaults.
"We came out well ahead," Fifth Third's Chief Marketing Officer Larry Magnesen told the Tribune. "These people are back to meaningful employment, and the family is staying in the house."
NextJob, which mostly works with employers to provide help for the employees that they've layed off, has been particularly innovative in expanding its reach. The company has two 40-foot buses filled with computer workstations, which it parks in underserved communities to offer up financial help.
"Job loss, followed by the loss of one's home, is severely damaging to individuals and families," NextJob's CEO John Courtney said in a press release announcing its new multiyear contract with Fifth Third Bank. "This program is a simple but big idea and it's time has come for the banking industry."
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Claire Gordon has contributed to Slate's DoubleX, the Huffington Post, and the book Prisons: Current Controversies. While an undergraduate at Yale University and a research fellow at Yale graduate school, she spoke on panels at Yale and Cornell, and reported from Cairo, Tokyo, and Berlin. Follow Claire on Twitter. Email Claire at email@example.com. Add Claire to your Google+ circles.more...